Grandfathered Health Plans

A grandfathered plan is a group health plan that was in place when President Obama signed the new health care reform law, the Patient Protection and Affordable Care Act (PPACA), on March 23, 2010. Plans remain grandfathered indefinitely unless companies:

Significantly reduce benefits

Increase costs to their employees, or

Reduce how much the employer pays toward benefits

As of November 17, 2010, employers have additional flexibility to keep grandfathered status if they:

Grandfathered plans are not required to comply with some of the PPACA provisions. See our timeline for more details.

Weighing the decision to keep grandfathered statusSo far, about 80 percent of Cigna clients have given up grandfathered status. Flexibility is the most common reason. For example, many employers want to offer a consumer-driven plan such as one with a Health Reimbursement Account (HRA). These plans can help improve health and better engage employees in their health while lowering costs for both the employer and employees.

As health care reform continues to unfold, employers need to think through whether it’s in their best interest to stay grandfathered.

Cigna is here to help clients assess their plans and costs in order to make the best choices during health care reform.

Individual and family medical and dental insurance plans are insured by Cigna Health and Life Insurance Company (CHLIC). In Arizona, individual HMO plans are insured by Cigna HealthCare of Arizona, Inc. Group health insurance and health benefit plans are insured or administered by CHLIC, Connecticut General Life Insurance Company (CGLIC), or their affiliates (see a listing of the legal entities that insure or administer group HMO, dental HMO, and other products or services in your state). Group Universal Life (GUL) insurance plans are insured by CGLIC. Life (other than GUL), accident, critical illness, and disability plans are insured or administered by Life Insurance Company of North America, except in NY, where insured plans are offered by Cigna Life Insurance Company of New York. All insurance policies and group benefit plans contain exclusions and limitations. For availability, costs and complete details of coverage, contact a licensed agent or Cigna sales representative. This website is not intended for residents of New Mexico.

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